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The World
U.S. Treasury secretary Janet Yellen said the US could reach full employment next year if Congress passes Joe Biden’s $1.9tn stimulus package. Yellen cited a forecast by the Congressional Budget Office that predicted that without additional stimulus, the unemployment rate would remain elevated for several years. (Financial Times)
Latin American and Caribbean economic activity will not return to pre-pandemic levels of output until 2023 and GDP per capita will catch up only in 2025, later than other parts of the world, the IMF said. (Reuters)
Senior Democrats will unveil legislation to provide $3,000 per child to tens of millions of American families. Under the proposal, the Internal Revenue Service would provide $3,600 over the course of the year per child under the age of 6, as well as $3,000 per child of ages 6 to 17. The size of the benefit would diminish for Americans earning more than $75,000 per year, as well as for couples jointly earning more than $150,000 per year. The payments would be sent monthly beginning in July, a delay intended to give the IRS time to prepare for the massive new initiative. (Washington Post)
A large part of the phase one trade deal between China and the United States that entered into force almost one year ago was a “failure,” according to a new report, although “several elements are worth keeping and building upon.” The US and China signed their long-awaited deal in January 2020, with the conditions of the agreement beginning one month later. As part of it, China committed to buying US$200 billion in additional goods and services over 2020-21 on top of 2017’s levels. But a report released by the Peterson Institute for International Economics shows U.S. exports of phase one goods to China in 2020 fell more than 40% short of the target. (South China Morning Post)
Burma’s military government promised unspecified “action” against its opponents today, in the first threat of a crackdown on tens of thousands of people demonstrating against last week’s coup. The warning on state television came during a third day of large-scale street protests in towns and cities across the country. Apart from isolated acts of violence by police, both demonstrators and police have so far shown restraint — but the new statement, the first time the junta has even indirectly acknowledged the massive opposition to the coup, suggests that the generals may be losing patience. Banks halted branch operations and workers leave factories for rallies; Myanmar's debt to China decreases 26% under ousted Suu Kyi. (The Times, Nikkei Asian Review)
Iran told the U.S. to lift all sanctions, then it’ll comply with nuclear deal. Biden said: No. Iran’s supreme leader says all sanctions must be lifted before Iran lives up to its nuclear deal, but Biden says the U.S. won’t make the first move. (Los Angeles Times)
Under heavy security and after several delays due to the coronavirus lockdown, Prime Minister Benjamin Netanyahu arrived at the Jerusalem District Court for a much-anticipated hearing in his corruption trial, focusing on his and other defendants’ response to the indictments and kicking off the intensified evidentiary phase of the trial. (Times of Israel)
Pope Francis offered a grim assessment of humanity's response to the pandemic in a lengthy speech that highlighted aspects big and small from a year of isolation and "despair." He talked about domestic violence in homes under pandemic lockdown. He emphasized the job losses predominantly among off-the-books workers, with no safety net on which to rely. He described a generation of children, alone and in front of their computers, enduring the “educational catastrophe” of school shutdowns or distance learning. The world, Francis said, “is seriously ill.” (Washington Post, Pope Francis speech)
The European Union will hold a video call today with allies of jailed Kremlin critic Alexei Navalny, joined by envoys from Britain, the United States, Canada and Ukraine, after Russia expelled diplomats from EU states last week. (Reuters)
Hundreds of Indian military personnel are searching for over 200 people unaccounted for after a part of a glacier collapsed and released a torrent of water, rock and dust down a mountain valley in the country’s Himalayan north, killing at least 19. (The Guardian)
A majority of Japanese remain opposed to holding the Olympics this summer, but the ratio lowered significantly from recent polls. Some 28% of respondents said they want the Olympics to be cancelled and the same ratio of people think they should be held without spectators. The poll showed a combined 61% wanting the Games to be postponed or cancelled altogether, around 20% points lower than recent opinion polls. Just 36% of the public are in favor of holding the Tokyo Olympics this summer, of which 28% are calling for no spectators while the remaining 8% back allowing spectators. (Reuters)
Hong Kong’s wealthy residents are feeling the pinch after a series of events that have devastated the local economy, while their mainland Chinese counterparts go from strength to strength. The number of US-dollar millionaires in Hong Kong fell in 2019. It was the only Chinese city in Hurun’s top 10 to report a lower number in the period. The gloomy picture is unlikely to change anytime soon, as Hong Kong now struggles through its worst recession on record. (South China Morning Post)
Personal satisfaction drops from 2020 record U.S. high: 82% of Americans are satisfied with the way things are going in their personal life, down sharply from last year's record high and the lowest since 2013. A slim majority of Americans are “very satisfied”; 65% were in 2020. Gallup has tracked this measure since 1979, when the record low 73% were satisfied with their personal life. Most often, satisfaction has been in the 80% range, with the sub-80% measures tending to come during prolonged, challenging economic times, including in the late 1970s and early 1980s and the Great Recession era. (Gallup)
Economy
U.S. 30-year bond yield hits 2% as inflation expectations rise. Long-term interest rates reach highest level in a year on bets that stimulus will fuel price rises. U.S. stock future rose this morning , putting the S&P 500 on course for a new record, as optimism about growth pushes stocks higher, and sends bond yields to their highest levels since last March. Oil surpassed $60 a barrel for the first time in a year. (Financial Times, Wall Street Journal)
Brazil's 2021 inflation outlook rises to highest in almost a year. (Reuters)
Bitcoin surged above $44,000 to a record after Elon Musk’s Tesla $1.5 billion investment. The electric car maker also said it would start accepting payments in bitcoin for its products, prompting a 10% jump in the electronic currency. (CNBC, Reuters)
Wall Street trading firms paid almost $3bn to retail brokers such as Robinhood to handle their trades last year — a practice that is attracting rising scrutiny in Washington. Monthly regulatory filings show “payment for order flow” earned US brokers $2.9bn in 2020. TD Ameritrade generated fees of $1.1bn between its broker-dealer and clearing divisions, while rival Robinhood grew fastest, earning fees of almost $700m. (Financial Times)
Alibaba Group Holding’s US$5 billion bond attracted an avalanche of orders from fixed-income investors, peaking at US$38 billion, on growing confidence that the e-commerce behemoth will emerge relatively unscathed from an antitrust investigation. (South China Morning Post)
As the pandemic persisted, financial pressures became a bigger factor in why Americans decided to move. (Pew Research Center)
Technology
Apple’s talks with Hyundai have broken down without an agreement for the South Korean auto giant to assemble vehicles for the iPhone company. In regulatory filings, Hyundai and Kia said they are “not in talks with Apple over developing an autonomous vehicle.” (Wall Street Journal)
Twitter is building subscription products to ease its dependence on ads, including “tipping” for exclusive content and charging for TweetDeck. (Bloomberg)
Clubhouse is now blocked in China after a brief uncensored period during which it was rapidly gathering steam. Thousands of Chinese users suddenly found themselves unable to access Clubhouse on early Monday evening as the country prepared to start the week-long Lunar New Year holiday. (TechCrunch)
TikTok is planning an aggressive expansion into ecommerce in the US, where it will go head-to-head with Silicon Valley giant Facebook. The Chinese-owned viral-video app has briefed advertisers on a number of new features for 2021, according to several people who have seen its plans, such as a tool that lets its most popular users share links to products and automatically earn commission on any sales. “It’s old-school affiliate marketing,” one senior advertising executive said, adding that video makers would be able to link to any products they liked, even if they were not formally sponsored by the brand. (Financial Times)
Eric Schmidt says the U.S.’s flawed approach to 5G threatens its digital future. The Former Google chief warns that the recent $81bn spectrum auction could hobble American innovation. (Financial Times)
Smart Links
China to hand out $1.5 million in a digital currency test during the Lunar New Year (CNBC)
Big oil’s huge losses raise prospect of mega mergers. (Financial Times)
An unleashed Jeff Bezos will seek to shift space venture Blue Origin into hyperdrive. (Reuters)
Facebook’s misleading campaign against Apple’s privacy policy. (Harvard Business Review)
People blame a vehicle's automated system more than its driver when accidents happen. (Society for Risk Analysis)
How the federal government could help kill the highways it built. (City Lab)